Sector movers: Cyclicals bounce back, Evraz in the lead

There was a clear split in the market on Wednesday as cyclicals bounced back and the more defensive segments of the market were relegated to the bottom of the pile.

Thus, shares in Prudential and Aviva were to be seen pacing gains among life insurers as yields on benchmark 10-year Gilts climbed four basis points to 1.46%.

From a global perspective, risk-appetite was stoked by better-than-expected quarterly numbers out of Apple overnight and a far stronger-than-expected reading on the state of the US labour market in January.

Private sector hiring in the States jumped by an outsized 246,000 in January, after a reading of 151,000 in the month before (consensus: 165,000).

Nonetheless, Paul Ashworth at Capital Economics cautioned that January's very strong ADP reading might have been the result of problems adjusting for seasonal factors at the start of the year due to the way the survey is compiled.

Then there was the survey's "spotty" track record over the longer-term.

"The upshot is that, while we wouldn’t dismiss the strength of the ADP number entirely, we would treat it with some caution, particularly in January," Ashworth said,

Against that backdrop, shares in Evraz were noticeably higher following their recent sideways movement.

Helping sentiment, the official Chinese manufacturing sector PMI ticked lower from a reading of 51.4 in December to 51.3 (consensus: 51.2).

"While recent raw materials headwinds are due to weigh on Q4 results and Q1 guidance, this near-term risk belies strong emerging steel market momentum looking through 2017. Regional steel prices remain supported by low customer inventories, uncompetitive imports and seasonally/structurally improving demand, and steelmaker margins are due to expand significantly into Q2," Seth Rosenfeld at Jefferies told clients in a research note issued the previous day.

Pharma shares were also wanted following US president Trump's meeting with big pharma executives during the previous session.

"This "carrot and stick" approach appears to have soothed concerns that Mr Trump may have felt compelled to take a sledgehammer approach to the industry and has seen Hikma, AstraZeneca and Shire Pharmaceuticals all push higher," commented CMC Markets's chief market analyst Michael Hewson.

Top performing sectors so far today

Industrial Metals & Mining 2,472.22 +6.54%
Life Insurance 7,719.83 +1.24%
Automobiles & Parts 8,122.44 +1.16%
Pharmaceuticals & Biotechnology 13,038.57 +1.11%
Construction & Materials 6,754.82 +1.00%

Bottom performing sectors so far today
Beverages 17,320.48 -0.83%
Gas, Water & Multiutilities 5,876.14 -0.77%
Personal Goods 28,994.00 -0.69%
Electricity 8,814.94 -0.65%
Tobacco 55,315.14 -0.59%